Just because you filed for bankruptcy doesn’t mean you can’t get a post-bankruptcy car loan. The first time you finance a big purchase after filing bankruptcy is a major challenge that many people encounter every day. Bankruptcy, after all, pretty much destroys your credit and hangs with you for a long time. How can you get someone to lend you money for car financing, for example, with a bankruptcy filing marring your credit report? The good news is, it’s possible. You just need to keep a few important strategies in mind before diving in, and you’ll find that re-establishing your credit is within your grasp.
Know Your Priorities
You may really want to dive in and buy a brand-new, high-end car. The truth is, that may be the kind of thing that got you in trouble in the first place. Obtaining car financing depends on being able to prove that you are responsible beyond that bankruptcy on your reports. Go for the least expensive car you can that will still be reliable. That’s your priority—reliability, not luxury.
Find the Right Deal
Take the time to search for the right option. It can be tempting to grab a car for $2,000 that will get you where you need to go for a year or two, and then do the same thing all over again. This results in a string of “drive it into the ground” purchases which can be a vicious cycle of you paying for repairs that you might not pay for if you can afford a car for $10,000 that you’ll be driving for five years. Know your budget and get the best car you can for what you can afford. While you don’t want to go for all the bells and whistles, you don’t want to skimp on quality, either.
Work on Your Credit
Obtain a new credit card—there are secured credit cards that you can use specifically to rebuild your credit rating by making small purchases that you immediately pay off in full. This will help you to build a new, good credit history which is a must for getting any kind of decent deal on car financing.
Do Your Research
This is the best advice that is often ignored. Call a number of dealers in your area, explain your situation, and ask if they’ll finance you. Then get them to give you a straight answer about the terms of the financing before you ever let them run a credit check on you. Don’t let them look into your background until they’ve told you they can get you a loan. This may take a long time and require many calls, but it will be worth it in the end.
Just because you have a bankruptcy doesn’t mean you can’t finance a car. You’ll need to carefully strategize your purchase and work on your credit, but if you know your priorities and are willing to be patient and research, a new car is within your grasp.